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Cost Savings Study of State Authorization Reciprocity Agreements

Summary

The National Council for State Authorization Reciprocity Agreements (NC-SARA) engaged NCHEMS to conduct an independent study analyzing the cost savings associated with institutional participation in State Authorization Reciprocity Agreements (SARA). SARA represents a collaborative effort among member states and territories that establishes standards for interstate distance education programs. The agreements aim to streamline state post-secondary authorization processes, improve coordination between states, and reduce application fees and administrative burdens. While SARA is designed to generate institutional fee savings, quantifying these savings at the institutional and state levels remains important for informed decision-making.

The 2025 study builds upon NCHEMS’ earlier 2021 analysis for NC-SARA, employing similar methodology to assess how much SARA participation saves compared to not participating and seeking authorization on a state-by-state basis. Both the 2021 and 2025 analyses conclude that SARA participation typically yields significant financial savings compared to serving equivalent distance student populations without SARA membership.

Challenges Approach

Challenges

To determine the potential cost savings provided by NC-SARA membership, we needed to determine what institutions would pay to enroll students across borders without NC-SARA membership. To determine this, the NCHEMS team compiled a complete dataset of state fee structures for all 50 states and the District of Columbia, and estimated the costs that would be incurred if institutions operated outside of their own state borders and paid each fee individually.

A challenge with this iteration of the study was managing outliers in the data. Some institutions with numerous programs and high enrollment skewed results, contributing to higher estimated savings in the 2021 study, which had fewer observations and fewer extra-large institutions. NCHEMS identified a strategy to manage these vastly different scales for distance enrollment so that average savings were not disproportionately impacted by the presence of large distance education providers in the dataset.

Approach

We used quantitative methods to capture the comprehensive impact of SARA participation on cost savings. We gathered updated financial and operational data from participating institutions across SARA member states through surveys and email communications with institutions and compacts. Using authorization fee data collected using a survey, we developed a multiplier to estimate cost savings. The multiplier was calculated by comparing the total fees that surveyed institutions currently pay to the fees they would pay if they were not members of SARA and chose to pursue authorization in the same states they currently serve. Finally, using the multiplier, we calculated national, state-by-state, and institutional-level cost savings estimates.